Couples – Joint Cover or Separate Policies?

Is there any benefit in couples each having their own life insurance policy?

The simple answer is yes.

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There can certainly be more benefit to couples each having their own cover but it may not always be necessary.

e.g. Let’s start with Mr. & Mrs. Jones, a mortgage of £100,000 and a life insurance policy for £100,000 over 20 years.

If Mr. & Mrs. Jones each have their own policy for £100,000:

a) One of them dies, the survivor will still have cover – but if one policy has paid out and the mortgage has been paid off, does the survivor need their cover?

If it’s affordable and there are children to think about, why not.

b) Mr. & Mrs. Jones decide to separate – their circumstances change so the cover may not be appropriate but because life insurance gets more expensive as you get older, it may make sense to keep the cover for the future.

& If it’s affordable and there are children to think about, why not.

c) Mr. & Mrs. Jones both die in an unfortunate accident – both policies pay out which would mean £200,000 is available to clear any outstanding debt and provide financial support to any remaining family.

So, if it’s affordable and there are children to think about, why not.

If Mr. & Mrs. Jones have a joint policy:

If one of them dies, the policy will pay out, the mortgage will be cleared and the survivor will not have any cover.

If they separate it may actually be possible to split the policy with some insurers but not with others so future cover may have to be rearranged.

If they both die, only one policy will pay out £100,000.

Not everyone needs life insurance. Young single people with no dependants and no debt are unlikely to have a need for cover but it does get more expensive with age. Circumstances can change so it is still worth thinking about from a young age simply because it is much cheaper.

And, if it’s affordable and there are children to think about, why not.